When does price discrimination go too far?

[Benjamin Frank 2.0]

Are you saying this is happening or you see this could happen?

Because I wrote on this here several years ago! And, I had forgotten that I didn't think of it myself, but took the idea from Tim Harford, The Undercover Economist (that's how he billed himself writing in the UK based newspaper The Financial Times), who wrote about this in his book The Undercover Economist published in 2005.

Harford argued at that time that even more than making money selling customer data, the real purpose of Facebook was to figure out every consumer's habits well enough that the algorithms could capture everybody's consumer surplus for the producer. Harford told people to never answer the little gamey surveys Facebook posted seemingly for fun.

As bad as 'data mining' and selling of personal data is, I think that concern is a smokescreen for this. Of course, if you try and search about this online, you'll find nothing, and I don't think it's because it's a wacked out conspiracy theory, but because Google's search engines wipe it from the internet.

The way this can be easily made legal is that everybody is offered the same base price (say $10 for something, which is higher than anybody would actually pay) but everybody is given a different discount.

So, there is no technical price discrimination because the initial price is the same for everybody but there is a discount that happens to be different for everybody. Even if price discrimination is illegal, price discounts are not only perfectly legal, but are encouraged by governments.

One way around this is to only buy stuff online using computers at libraries.

[Benjamin Frank 2.0]

Are you saying this is happening or you see this could happen?

Because I wrote on this here several years ago! And, I had forgotten that I didn't think of it myself, but took the idea from Tim Harford, The Undercover Economist (that's how he billed himself writing in the UK based newspaper The Financial Times), who wrote about this in his book The Undercover Economist published in 2005.

Harford argued at that time that even more than making money selling customer data, the real purpose of Facebook was to figure out every consumer's habits well enough that the algorithms could capture everybody's consumer surplus for the producer. Harford told people to never answer the little gamey surveys Facebook posted seemingly for fun.

As bad as 'data mining' and selling of personal data is, I think that concern is a smokescreen for this. Of course, if you try and search about this online, you'll find nothing, and I don't think it's because it's a wacked out conspiracy theory, but because Google's search engines wipe it from the internet.

The way this can be easily made legal is that everybody is offered the same base price (say $10 for something, which is higher than anybody would actually pay) but everybody is given a different discount.

So, there is no technical price discrimination because the initial price is the same for everybody but there is a discount that happens to be different for everybody. Even if price discrimination is illegal, price discounts are not only perfectly legal, but are encouraged by governments.

One way around this is to only buy stuff online using computers at libraries.

I'm saying this is something that could happen in the near future. It's def already happening to some extent already as you allude to with targeted advertising, but still don't think it's at the extreme where Consumer Surplus is eliminated.

I agree the discount way would be a smart way to go about it. I feel like many places already sort of manipulate with discounts (i.e. LIMITED TIME 50% OFF when it's just always at the market price of 50% and very few would be willing to pay the full price).

My main concern is how does the average consumer fight back and retain their surplus? I think it's through education; many people are never educated on the idea of economic or consumer surplus, and a lot of people are really bad about taking a second to think about why they may be getting a certain ad on their phone or what not before they buy.

Also perhaps someone could develop a mainstream software that just messes up data collection by firms so they don't have the data to squeeze your consumer surplus out of you.

Perhaps this is part of the reason why younger today feel so poor even though statistically they're doing just fine; the rise of technology means they have less of a consumer surplus.

As I said, the best way to fight this is to use public library computers when buying online as you are completely anonymous.  I believe this can be done and that people don't need cookies when shopping on Amazon or where ever else. I don't really buy stuff online so I don't know.

[Benjamin Frank 2.0]

Are you saying this is happening or you see this could happen?

Because I wrote on this here several years ago! And, I had forgotten that I didn't think of it myself, but took the idea from Tim Harford, The Undercover Economist (that's how he billed himself writing in the UK based newspaper The Financial Times), who wrote about this in his book The Undercover Economist published in 2005.

Harford argued at that time that even more than making money selling customer data, the real purpose of Facebook was to figure out every consumer's habits well enough that the algorithms could capture everybody's consumer surplus for the producer. Harford told people to never answer the little gamey surveys Facebook posted seemingly for fun.

As bad as 'data mining' and selling of personal data is, I think that concern is a smokescreen for this. Of course, if you try and search about this online, you'll find nothing, and I don't think it's because it's a wacked out conspiracy theory, but because Google's search engines wipe it from the internet.

The way this can be easily made legal is that everybody is offered the same base price (say $10 for something, which is higher than anybody would actually pay) but everybody is given a different discount.

So, there is no technical price discrimination because the initial price is the same for everybody but there is a discount that happens to be different for everybody. Even if price discrimination is illegal, price discounts are not only perfectly legal, but are encouraged by governments.

One way around this is to only buy stuff online using computers at libraries.

I'm saying this is something that could happen in the near future. It's def already happening to some extent already as you allude to with targeted advertising, but still don't think it's at the extreme where Consumer Surplus is eliminated.

I agree the discount way would be a smart way to go about it. I feel like many places already sort of manipulate with discounts (i.e. LIMITED TIME 50% OFF when it's just always at the market price of 50% and very few would be willing to pay the full price).

My main concern is how does the average consumer fight back and retain their surplus? I think it's through education; many people are never educated on the idea of economic or consumer surplus, and a lot of people are really bad about taking a second to think about why they may be getting a certain ad on their phone or what not before they buy.

Also perhaps someone could develop a mainstream software that just messes up data collection by firms so they don't have the data to squeeze your consumer surplus out of you.

Perhaps this is part of the reason why younger today feel so poor even though statistically they're doing just fine; the rise of technology means they have less of a consumer surplus.

As I said, the best way to fight this is to use public library computers when buying online as you are completely anonymous.  I believe this can be done and that people don't need cookies when shopping on Amazon or where ever else. I don't really buy stuff online so I don't know.

Wouldn't an easy way around this be for companies to force you to create an account in order to buy anything? Even if you're on a library computer, if you're on a personal Amazon account that personal account still knows your info.

Oh right. Oh well.